Kaleidoscope Cutlery manufactureskitchen knives. One of the employees, whose job is to cut outwooden knife handles, worked 49 hours during a week in January. Theemployee earns $14 per hour for a 40-hour week. For additionalhours the employee is paid an overtime rate of $19 per hour. Theemployee's time was spent as follows:
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|
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Regular duties involving cutting out knife handles
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41
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hours
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General shop cleanup duties
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6
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hours
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Idle time due to power outage
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2
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hour
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a)Calculate the total cost of the employee's wages during the weekdescribed above.
b)Determine the portion of this cost to be classified in each ofthe following categories
- Direct Labor
- Manufacturing overhead(idle time)
- Manufacturing overhead (overtime premium)
- Manufacturing overhead (indirect labor)